HSBC riles Hong Kong bankers with plan to end private offices
SENIOR investment bankers at HSBC Holdings in Hong Kong could lose their private offices, as the firm moves towards open-plan desks for the financial hub.
The plan follows similar moves at HSBC’s headquarters in London two years ago when the lender scrapped the executive floor of its Canary Wharf base, leaving chief executive officer Noel Quinn and other senior managers hot-desking. Globally, HSBC is looking to cut office space by 40 per cent from pre-pandemic levels.
Sources, who declined to be identified as the information is private, said the plan is in line with a broader move across the company, and that the investment-banking division was not singled out.
One of the sources said that HSBC’s main offices in Hong Kong are being renovated, and some senior investment bankers could lose their private offices once that is completed. There will still be private rooms for bankers to get together to discuss sensitive information, the source noted.
The plan has caused angst among some executives, who say there are potential confidentiality risks. Some bankers warned that scrapping private offices raises issues around privacy as senior executives often discuss sensitive information with clients.
A spokesperson for the lender said it constantly evaluated its global real estate footprint “to optimise space where appropriate, to increase flexibility and choice for our people”.
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The potential loss of private offices comes after a difficult year for deal-making, which saw the overall bonus pool shrink to the lowest since 2020, led by a drop for the global banking and markets division.
Costs have been a particularly sore point for HSBC. Major shareholder Ping An Insurance Group last year urged the bank to deepen cost cuts. In a Feb 21 note, Morgan Stanley analysts said investors needed “reassurance of cost discipline going forward” after HSBC missed spending estimates in the fourth quarter.
The bank’s adjusted operating expenses rose 2 per cent in the three-month period, in part due to higher bonuses, and it flagged that costs would rise about 3 per cent this year.
According to the bank’s strategic report, since 2019 it has reduced its office real estate footprint by 37 per cent, branches by 21 per cent and operations headcount by about 11 per cent.
The lender is also looking for a new global headquarters around half the size of its current space in Canary Wharf. The move is a stark illustration of how pandemic-driven changes to working practices are reshaping London’s office landscape. BLOOMBERG
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